Canada’s new First Home Savings Account (FHSA) is another registered savings account that will help first-time homebuyers to save up for a home. This new account will allow first-time homebuyers to contribute up to $8,000 per year, with a lifetime limit of $40,000, towards a new home - and it can be combined with the Home Buyers’ Plan (HBP) 🏡
The account can stay open for 15 years, or until the end of the year you turn 71, or at the end of the year following the year in which you make a qualifying withdrawal from an FHSA for the first home purchase, whichever comes first. ⏰
Benefits of the FHSA
- Contributions made to an FHSA are tax-deductible, reducing your taxable income for the current year
- Contributions aren’t limited to a down payment - you can transfer the money to an RRSP or RRIF without affecting your contribution room
To open an FHSA, you must be:
1. A Canadian resident
2. The age of majority, either 18 or 19 depending on the province (18 in Ontario), and under 71 years old
3. A "first time homebuyer" i.e., you and your current spouse or common-law partner must not have owned a home that you lived in as your principal place of residence, at any point during the portion of the calendar year before the account was opened and in the 4 preceding calendar years
4. You must not have already used the FHSA for the purchase of a property
📌 Tip: Combine the FHSA and the HBP to maximize your First Time Home Buyer benefits!
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